live from new york, where business never sleeps, this is "squawk box." good morning, everyone. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. there is news breaking overnight that an egyptian air flight from alexandria to cairo was hijacked. officials in egypt say a hijacker claimed to have an explosive belt and forced the airbus 320 to fly to cyprus. most of the passengers have been released at the airport in cyprus after negotiations. the hijacker is still holding seven people hostage, according to egyptian officials. a high-level source tells nbc that the reason for the hijacking appears to be a personal matter involving a woman, possibly his ex-wife, who they think is cyprus. egypt's aviation minister says the hostages include four foreigners and seven crew members. although that, number is changing, it does look like he's released more people. we'll bring you updates as the story develops. >> what a strange, strange

story. when i woke up this morning, nobody was thinking about wives and other things. >> when you hear a hijacking story and an explosive belt, you immediately jump to the terrorism activity. this one sounds a little different. first of all, he's actually released most of the hostages. >> usually don't hear it's about a woman. >> it's about reuniting with his ex-wife. that's what this is. >> it's, i guess, different than if he was -- >> i'm just saying, a very different opinion. >> it's not fun. he wants to reunite with his wife. i could maybe see the other situation. he wanted to leave, get me out of here. >> the egyptian ministry of foreign affairs told the guardian this morning he's not a terrorist, he's an idiot. terrorists are crazy, bus they aren't stupid. this guy is. >> i'm sorry. it's not funny. >> no, but it's -- >> so that was a quote. >> that was a quote. >> he's not a terrorist, he's an idiot. >> that's what apparently the

egyptian ministry of foreignguas morning. >> again, there are some hostages still being held. hopefully we can receive some sort of resolution. >> i bet it's not a real explosive belt. >> there are huge questions about that. >> in the meantime, we are also learning more this morning about the man shot at the u.s. capitol yesterday afternoon. police say 66-year-old larry dawson of tennessee walked into the capitol visitor center's was shot and wounded by police after he point what had appeared to be a weapon at the officer. the weapon turned out to be a pellet gun. dawson is in stable but critical condition this morning after surgery. a bystander was hurt but not critically during the shooting. dawson was known to capitol police. he had been ordered to stay away from the capitol after an outburst during a congressional session last fall when he interrupted proceedings by yelling, "i am a prophet of god." he's charged with assault with a deadly weapon and assault on a

police officer while armed. also, what's on today's economic business calendar. fed speak topping that agenda. fed chair janet yellen will be delivering remarks today. she's coming to new york. she's going to be at the economic club of new york just after noon eastern time. that's going to be followed by a q&a with moderators. john williams is also speaking in singapore at this hour. dallas fed president rob kaplan will be in front of the mike this afternoon. so a lot of fed folks to hear from. >> maybe we'll finally get an answer out of janet yellen on this debate raised by the hawks last week. >> we'll see whether they're all in the same place now. the monthly s&p case-shiller home price index is out. that's followed by consumer confidence. finally, a former partner at pjt partners, formerly blackstone, has new been arrested on charges he stole $25 million from

investors and tried to take another $70 million more. he posted bail of $5 million on criminal wire and securities fraud charges. he was an employee at park hill group, which is owned by pjt and is that spinoff of blackstone. pjt has fired him and initiated an internal investigation. shares tumbling on that news. who wants to play anchor right now? anybody? >> sure. i'll take it. in corporate news, yahoo! has set a deadline for april 11th to submit preliminary bids for its internet business and asian assets. "the wall street journal" reports that means yahoo! could close a deal by june or july. the company launched an auction of its core business in february after it shelved plans to spin off its stake in alibaba. let's check on the markets this morning. futures were indicated higher initially. now in the u.s., indicated

lower. not large losses yet. down about four points on the s&p. the dow jones indicated down about 30. the nasdaq indicated down about five. it wasn't an issue in europe this morning. europe was either flat or slightly in the green. that may be why we have weakened as well. fractional losses in germany and england. in france, up just a little bit. i saw in asia the shanghai was down a little bit. down 1.25%. oil probably not helping this morning, down almost 1.8%, down 70 cents on wti. 38.68 now. government announcing it has successfully accessed the data that was stored on that iphone used by one of the san bernardino shooters. eamon javers joins us now with more. good morning, eamon. >> good morning, joe. jae, an absolutely stunning

develop yesterday in this long-running fight between apple and the u.s. government. the government announcing yesterday that not only had it discovered a method to get into that locked iphone, but it already accessed the phone and accessed that information. so now we have some dueling statements here from apple and the fbi. start with the fbi on apple. the fbi saying, during the past week, to include the weekend, extensive testing of the i foeb was done by highly skilled personnel to ensure the contents of the phone would remain intact once technical methods were applied. the full exploitation of the phone and follow-up investigative steps are continuing. apple, for its part, saying that from the beginning, we objected to the fbi's demand that apple build a back door into the iphone because we believed it was wrong and would set a dangerous precedent. as a result of the government's dismissal, neither of these

occurred. this case should never have been brought. so a couple of big open questions here that the government was not answering for reporters last night on a conference call to brief us all on exactly what was going on here. it's not clear who brought this technique to the government's attention, what specifically the technique s or whether or not the u.s. government will share this new security vulnerability with apple. apple had earlier said that if they figured out what this was, they would want the government to share that information. not clear now whether the government will hold that information for use in future cases or will share it with apple so apple can patch what it will see as a security hole in its systems, guys. so a lot of issues raised here. this issue seems to be over with. but the ongoing debate about security and privacy, that's going to continue. >> eamon, you look at this, trying to be an armchair quash here, who's the winner? >> that's a really good question. so apple suffered some damage

here. apple's damage is that, a, it was resisting the u.s. government in a terrorist investigation. that's never a comfortable position for a company to find itself in. and b, we now know there is a vulnerability to the apple iphone, at least this particular model running this particular software. so that would seem to be some reputational damage for apple. the government also getting some reputational damage here. seen by a lot of people across the country as overreaching, as sort of big brotherish in attempts to get into the iphone. i think there's damage for both sides here. the government ultimately failing to make its case here and failing to convince apple to do what it wanted. ultimately, apple gets what it wants in that it doesn't have to write the code. >> but the government also gets what it wants. eamon, i hadn't thought about it until you were just going over that language again. when apple said in its statement it was successful and not having to build a back door, that have the overreach the government was

really shooting for, what happened? why couldn't there be some sort of agreement reached quietly without all this attention where apple provided them the information that was in that phone without creating a back door or doing what this hacker has supposedly done? >> that's a really good question, becky. at some point they were talking behind the scenes very privately about what's going on here. then this thing exploded into public view. it became really heated, really personal. there was a real level of anger here that you rarely see in these kinds of public debates. a technical issue like this one. >> it probably was some sort of government overreach that apple said, forget about it. >> and that's exactly it. what apple was objecting to was being forced to write the code itself, brand new code that didn't exist that would give the government access. they said they're willing to help in any way they could, other than writing what they saw

as a master key back door to the iphone. they said it would be dangerous if that code somehow leaked out and escaped into the wild. >> it's just kicking the can down the road because a company is going to come up with a way to make a warrant-proof phone. >> that's what the government is fearing. >> and we have to decide whether you're actually going to pass legislation that would make that illegal to make a warrant-proof phone. you're going to need that level of security in this world eventually. it's kicking the can down the road, but sooner or later, you're going to have this argument again. >> president obama said this at south by southwest the other day. he said, look, this debate about security of the iphone is sort of fetishizing the iphone above everything else. we as a society have decided that law enforcement with a warrant can go into your house, can search your bedroom, look in your underwear drawer if they're

conducting a legal investigation with a legal court order and a warrant. why can't they look in your phone? what's the difference? so from the government's perspective, this is very straight forward. from a civil libertarian and technology -- >> between the arctic monkeys and the foals. between those two. >> it was a hot seller. >> two issues for you. one, do you think the fbi will ultimately come forward and say what they found on the phone, and does that present potential brand damage to apple if, in fact, they're able to say, indeed, we found information about another cell or other information that's leading us to an investigation that would help us fight terror. what does that do, if, in fact, they're able to say that? >> i have no idea whether they're going to turn this hack, information over to apple. probably it's the case that apple has some sense of how this is possible, right.

whether the government says specifically to apple, here's what we did, steps, a, b, and c. i don't know. it's a valuable tool for the government now to get into these phones. >> there's no way they're turning that over. >> last night i was reading through material. the fbi has talked about the principles of which they would give over that kind of information, if they hack something, when they would give it over. the principled thought to the extent they have one on this is that they do want to give over how they hack things to the companies if they believe it represents a potential threat to the public. >> right. >> but in certain instances, they say they'll hold back and not provide the hacked information or at least how they attempted or approached the hack for some period of time so they could exploit it if they think that there is -- if they think it doesn't present a huge problem to the rest of the public. because, by the way, this has to occur directly on an individual phone as opposed to being able

to hack the icloud or g-mail. i imagine it's possible they don't provide this information to apple any time soon. >> absolutely. and the other big question here is going to be bhafs on that phone. what was this fight all about in the first place? was there actionable intelligence on that phone about what syed farook was up to, who he was connected with, what steps he took before the san bernardino shooting, how that plays out will embarrass one side or the other, either the government if it turns out there was nothing there, or apple if it turns out there was real intelligence there. >> eamon, thank you. giving us a lot to mull over today. in the meantime, the fuel that's been powering the bull market higher could be losing steam. stock buybacks have slowed to a 21-month low, raising fears that a downturn could be near. joining us now is quincy crosby, market strategist at prudential financial. also, president of the iht wealth management. welcome to both of you. good to see you.

>> thanks. >> let's talk as we head into earnings season, this idea that stock buybacks are down to a 21-month low. definitely seem to be losing steam. do the companies know something we don't? >> no, i think basically they may be wanting to hold on to measure cash, watching the market themselves. the fact is before the earnings season, you're going to have a blackout period. >> which is what we're in right now. >> exactly. but nonetheless -- >> i think this is a trend that's been coming for months. >> exactly. this goes to the point that fundamental really are going to matter. whether or not you think janet yellen is going to be accommodative today or not, hawkish, dovish, the fact is we're moving closer to where we need growth. we need fundamentals. we need revenue growth to pick up. we need the bottom line to show companies are doing well. >> you think we'll see that? >> no, it's been very, very difficult. i think this is another reason why we're fully valued right

now, overbought, and the market is basically saying we got to see what companies have to say. we're moving in that direction. in terms of seasonality, we're going from probably the best period in the markets to statistically, doesn't mean it always happens, but the worst period in the market. you have normal caution in the market. >> you just mean from stock perspective prices. >> yeah, from a stock perspective. again, it's a normal caution. and the point here is if negative interest rates is the next frontier in monetary policy, that's telling you that this market needs to have the fundamentals. we have to move in that direction and have winners and losers in the market as we go through earnings season. >> steven, i know you think stocks are fairly valued at these levels. we have come back pretty sharply. what happens if janet yellen has a hawkish message today? how does that change? >> why are we so scared of 25 basis points? aren't we like a year overdue on this? >> but the market has had this massive reaction, in part

because of the dollar sensitivity. >> i completely understand that, but we're virtually still at zero. let's move a little bit. we'll be okay. there will be some bumps along the way. that's fi that's fine. i understand the rest of the world is going the other direction with negative interest rates and 500-year lows, which is dumb, and they've got to get past it. but we can raise our rates a little bit and the economy is going to be just fine. the stock market might drop a couple points right off the bat, but it will show we're nearing full employment. >> usually that's very good news for the stock market. if the economy is strong enough to take all this in. it does come to that question of earnings. if the dollar strengthens again -- >> it's never perfect. it's never going to be perfect. it's never, ever going to be like the magic day we can raise rates five points and get back to the norm. let's move a little bit now. i know it's not the perfect day for it, but let's move a little now, move a little more later this year. it's not going to happen because of all the fears and earnings

season isn't perfect. i know the buybacks aren't happening to the same extent, but they've been doing that to an extreme for five years now. how long do you expect them to continue to do that? >> those are all arguments for why the fed should have raised rates. >> they should have. >> at least a year ago. >> at least. i get why i did that night late summer, but they missed their window in the spring and summer, beginning of summer last year. now we're paying the pras a little bit for that. >> what would you tell equity investors in terms of u.s. equities at this point? would you tell them to go ahead and invest cautiously? >> this is the calm before the storm. we've got the fed fight. every fed person is giving a different story. they got to get their story straight. then we have the political world with what's about to happen. we would have never assumed a year ago that we were going to have the extreme views that we have going out there and the complete unknowns. let's be honest. no one knows what's going to come out of trump's mouth. >> you sound like you're telling people to wait and kind of ride some of this out before they invest. >> if it comes down to trump and

sanders, i'm going to cash. i'm being honest with you. it's going to be that extreme of volatility you'll see in the markets. it's probably not going to happen though. in the meantime, i'm still investing. i'm buying my pieces. i'm buying energy every time it dips down below where it should be. i'm a little worried about banks. i think there's a lot of banks out there that have been propping up some of these lower end energy companies that we could have some issues with. but technology, absolutely. wonderful technology companies out there. finding our pieces, getting across the board, short end of the yield curve. absolutely. >> i want to thank you both for being here today. >> thanks for having me. some earnings to tell you about this morning. just crossing the wire from home builder lennar, beating on the top and bottom lines. earning 63 cents per share for its latest quarter. also a 10% increase in new orders. also a 12% rise in deliveries when we come back, anti-establishment support has been a common theme. we're going to talk to a donald

trump supporter and a bernie sanders supporter. we'll talk about that next and what's driving voters away from the so-called party elite. we're back in a moment.

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welcome back to "squawk box." senator bernie sanders and gop front runner donald trump tapping into a well of voters that are fed up by the so-called establishment politicians. while their outsider message is resonating with supporters, can either candidate carry the momentum and win the general election? that's the question. joining us now is a gop strategist and former surrogate with the romney campaign back in 2012. also, larry cohn, senior adviser and surrogate to the bernie sanders campaign. he's the former president of the communication workers of america. good morning to both of you. >> good morning. >> explain. do you believe that trump in a general election, not up against bernie, though. we're going to talk to bernie's guy in a second. but up against hillary can win given the poll numbers? >> absolutely. listen, we're 7 1/2 months out. there's a lot of time left from now until the general election on november 8th for trump to pivot toward hillary clinton,

which he hasn't done yet. >> what does that pivot look like? >> it looks like what we've seen since right before super tuesday for trump. it looks like a softening of the message to a degree, which you can do over the -- there's going to be a lot of down time, hopefully once the republican party coalesces around trump. it looks like a softening of the message, concentrating on the issues, foreign policy. it looks like -- >> you saw the piece in the journal today. >> yes. >> okay, yeah. >> everybody's got opinions. >> he said hillary is not exactly -- you know, she just lost five of six states to a formidable candidate, larry. no question there. a little surprising she's having trouble beating a 74-year-old socialist. >> and the b.i. thing is real. there's over 100 agents assigned to this case. >> when starting to talk to trump about his treatment of women, he shut that down.

>> imagine trump in a debate versus hillary. what does that look like? hillary is a completely scripted candidate. she's only one two elections in her career. >> 60 and 54. >> within the margin of error. it's going to be a very close election. there's no doubt about it. but it's absolutely -- >> you're the first romney guy that hasn't said, oh, no, we're just trying to hold on to the senate now. we've already written off this 2016. we're planning for 2020. >> i really respect romney. fully behind him in '12. i think this was a mistake for him. >> you do? >> to come out against trump that strongly. but it's played well for trump. the voters do not want the same candidates they've seen. they want more authenticity than they've seen in the last 30 years. this is the best candidate we've had since ronald reagan. >> larry, explain this. if trump is the candidate on the other side, is bernie better than hillary, and why?

>> yeah, absolutely he's better than hillary. he's polling far ahead of hillary in that matchup, or in a matchup with cruz or anyone else on the republican side. i think authenticity is key in this election. and bernie has been on this same path his entire life, talking about economic justice, social justice. it can't just be markets. although, ironically, for your viewers, he does believe in stimulation and economic growth compared to any of the other candidates. reinvestment, whether it's cancelling out student debt, investing in higher education, or any other parts of the economic program. it's all about stimulus and growth. >> where did you think -- we keep talking about the elites and how these candidates don't appeal to the elites. where do the elites ultimately land? >> who are the elites? talking about the republican establishment. am i part of the establishment? is christie part of the establishment?

and the republicans will fall in line, including some of the elites. what are they going to do, vote for bernie, vote for hillary? all this talk right now is similar to 2000. there was thought the mccain people wouldn't support george w. bush. they did. depending what happens with this fbi thing, it could be really bad for hillary. >> i thought we determined yesterday, you were the one who told me you thought the fbi thing was coming to an end. >> there was "the l.a. times" story. >> who was on that yesterday? on "morning joe" said that the bar -- and there's no legal statute that says the bar should have to be higher to bring criminal charges for something like this, but there is. there probably is a higher bar in the middle of a presidential election. you've got a justice department that is part of the obama administration going to decide

whether a candidate is going to be able to continue the obama legacy. there's no way they're bringing charges against her. >> you have to remember, though, the clinton-obama relationship has been terrible for a long time. >> that's true. >> there's a lot of tension there. if obama wanted to sweep this under the rug, he could have done it and waited until after the election. >> he did sweep it under the rug. he said there's nothing criminal. >> larry, what do you do about this candidate -- not this candidate, but rather this voter. the wall street voter who watches the show, who is traditionally a democrat who would normally vote for hillary. but if your candidate wins, becomes much more complicated. >> well, again, i would say this is a candidate bhost going to invest in america. we're talking about a trillion dollars in infrastructure. we're talking about free higher education at public institutions. this stimulates the consumer back into the market. consumers who are workers for

the most part and haven't had a raise in 30 years. >> larry, one last thing. boris said that donald trump will modulate his message if he gets to the general. do you think that your candidate modulates the message? >> i think our candidate -- i think bernie's message works in a general election. that's why he polls so far ahead of the republicans compared to hillary clinton. he is talking about every day issues. health care, higher education, new roads, schools, and bridges. i think we stay on that path. no more regime change in terms of foreign policy. >> would you agree both of your candidates are appealing to disaffected voters who feel they've been lied to for years and years by the establishment? >> i think that's who trump appeals to. i think that's all who sanders appeals to. trump appeals to a huge swath of the population. he's going to bring in michigan, ohio, and pennsylvania. new york will be wide open for a republican candidate. it really is a game changer. as far as bernie is concerned, i

don't understand trying to vilify the millionaires and billionaires as he does. there's no reason to do that if you're trying to uplift america in some way. >> the goal isn't to vilify. the goal is to say to working americans that you have a chance in this country too. in 30 years you haven't had a raise. in fact, this country belongs to you as well. it's not just about sending your kids into the service so that they have a chance. it's about jobs across the economy. it's about raising standard of living across the economy, not just for people on wall street. >> they wake up early. they watch shows like this, they go to work, come home, and wake up again. there's no reason to vilify any portion of the electorate. >> it's not about vilifying. it's about holding up every day people, like the people i saw yesterday who get told that despite the profits of yaw nited technologies, in a year they're out of a job and the work is all going to mexico. those people want hope.

they don't want to be told to tune in and watch the markets go up our down. >> but don't vilify other people who employ a lot of folks. >> the only person using the word vilify is you. >> wall street is a criminal enterprise and it's based on fraud. you got a guy like blankfein, he didn't inherit that money. his father, i think, worked for the post office in the bronx. so that's what you want supposedly, larry. you want people to be able to work, be raised in the bronx with your father as a postal worker who grows up and becomes a millionaire. what's wrong with that? he didn't inherit it. >> my family came here in '93. i've been lucky enough to be successful. that's the american dream, isn't it? >> the american dream is kids can go to college and don't leave with loans they pay off for the rest of their life. and people don't get sick when they're older and they say the choits is between the apartment you live in and the drugs you need to stay alive.

that's what we're talking about. we're not talking about vilifying at any central part of this campaign. this campaign is about restoring an american dream. >> it seems like the sanders campaign is concentrating on people who do not know how america works, do not know how politics work, and don't know how business works. it is those big businesses that employ people. if you say big business is terrible, banks are terrible, the economy is going to be terrible because there will be no one left to employ anybody. where are you going to get jobs if all the people who you call millionaires and billionaires are out of work? >> as you well know, it's about investment. it's not about vilifying. it's about investment and infrastructure. investment in higher education, investment in health care for all as opposed to what we have now with 20% of every health care dollar as administrative. it's about bringing the united states into the 21st century where all the other economies

are. >> so we should be like the other economies of the world. >> okay. gentlemen, we have to leave it there. boris and larry, in fairness to larry, trump as vilified a number of people along the way. we do appreciate you being here. thank you. >> coming up, a lot of mobile phone customers don't actually use the phone part of their device at all. one carrier is looking to make the most of that. details coming up. as we head to break, here's a look at yesterday's s&p 500 winners and losers.

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welcome back to "squawk box" here on cnbc, first in business worldwide. developing story this morning. an egyptian air flight from alexandria to cairo hijacked and flown to cyrus. re-hemaellis is following that story from london. j she joins us now with more. >> good morning. this has been unfolding overnight and all morning. as you point out, this was an egypt air flight, ms-181, a domestic flight that was scheduled to go from alexandria to cairo. it ended up landing in cyprus. the hijacker claiming to have an explosive belt. it has not been confirmed whether or not that is true, but authorities are proceeding as if

it were. on board that flight there were 55 passengers. i think we have some pictures where the hijacker allowed the majority of the passengers to get off that plane. women and children were included in that number. we can also tell you that according to authorities, there were eight americans on board. currently at this point, authorities say seven people remain on that flight, including three crew members, one security officer, and we believe three foreigners. the idea of those foreigners is -- the nationality, i should say, has not yet been confirmed. what authorities are saying now is that they have identified who the hijacker is. they say it is a man named seif eldin mustafa. exactly what he's demanding sun clear. the president of cyprus says this is not a terrorist event. he says it is a domestic situation. reportedly the hijacker is claiming he wants to have a meeting or conversation with his ex-wife. reports are that she is a woman

from cyprus. again, the good news is that the majority of these passengers have been allowed to get off of this plane, and they got off safely. seven people remain on this plane. authorities are negotiating with the hijacker, hoping to bring the situation to a peaceful end. andrew? >> okay. thank you to nbc's rehema ellis. right mow it's time for the executive edge. t-mobile is acknowledging many of us don't use the phone part of our phones anymore. reports say the wireless carrier will launch data-only plans later this week. they include unlimited texting but no voice service. that would never work for me, but these plans range from $20 a month for two gigabytes to $95 a month for 22 gigabytes. joe? >> can you do -- you can text? >> you can text, but you can't talk on the phone. >> that would almost work. it's a very rare thing. >> i still use it for phone calls. >> you use your blackberry. >> actually, the iphone

sometimes too. i use both. >> it's mostly not a phone now for most people. >> mostly it's a camera, texting, e-mail. >> internet explorer, whatever. what do i use? chrome? >> magneto for you. >> oh, yeah, yeah. atomic light. >> i don't even know what atomic light is. >> i know you don't. that's why you're so cautious. anyway, a simple blood test may be able to detect concussions. researchers from orlando health found a protein released by the brain during injury that stays in the bloodstream for up to weeks. thissi ing this could help detect delayed symptoms and help you skip the radiation exposing scans to see if you have any lasting concussion damage. we all talk about this in a way that none of us have ever been hit really in the head. >> my brother had a lot of concussions from playing soccer and stuff. >> from playing soccer? >> yeah, he had several of them

along the way. it's a rough sport too. and it's scary because you have to stay up all night. you have to watch them and monitor them all night. you can't let them sleep. it would be very useful. >> it could be. just monitoring someone and saying is the concussion lasting or is it not. everything is chemically mediated anyway. there should be a marker for all this stuff. also, hip-hop mogul sean combs opening a charter school in harlem where he grew up. it's called capital preparatory harlem. it won't open until next fall. coming up, the beer battle. 98% of all operating breweries in the u.s. now are craft beer producers. so how are the big brewers combatting that trend? we're going to break that down and who's guzzling the competition next. as we head to break, a quick check on what's happening with the european markets right now.

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welcome back, everybody. we've been looking at the u.s. equity futures this morning. they have been a little weaker. of course, we're waiting to hear what janet yellen says later this afternoon. right now, the dow futures below 16. the nasdaq off by 1 1/2. >> and beer is getting a boost. at least part of that segment. the brewers association, the nation's largest craft brew trade organization, is estimating that craft beer brands more than doubled their share of the $100 billion beer market to 11% in the past four years. big beer distributors also

rising. joining us now to discuss if there's a beer bubble, the senior research analyst specializing in the beverage industry. overall, beer sales are not rising. >> they're not. the category is roughly flat. but there are some real pockets of growth, particularly coming from craft beer, as well as mexican imports, which are outpacing craft beer. >> big mistake to get rid of the most interesting man. but he's getting long in the tooth. >> they have the new guy, who sounds pretty good too. have you seen the ads? >> a new most interesting man? >> no, not a new most interesting man. although, he is a pretty interesting man. >> i'm ready. i already commercials made that we've made here. you've seen them. >> oh, yeah. >> ready to step right in, take his place. >> when i go into an art gallery, they let me touch the art. that was one of them. i like that one. so 20 by 20 is what the draft

brewers want to do. they're at 11%. that's from zero, how long ago? like 20 years ago. >> yeah, very small 20 years ago. >> they want to get 20% market share for craft by 2020. 20 by 20. >> craft beer tends to be more expensive. it's already over 20% in dollars. that's for a $100 billion plus industry. >> who is overall -- beer itself, what is the demographic of who's drinking any kind of beer right now? what's the age? >> beer drinkers tend to be a little younger. you're thinking about your millennial gen y. in any given sitting, they're going to drink more beer. >> i have a vision of a 50-plus-year-old that's still a beer drinker, and it's not a pretty vision that i have of that person. >> well, they're going to be a category loyalist. that's the problem we're seeing. >> they're fat. they have horrific beer guts. you have to switch to something that doesn't bloat you like

that, don't you? >> i think it depends on what kind of beer you're drinking. >> i'm not speaking for myself, by the way. >> got a friend. >> it's a young man's drink, isn't it? >> i think american consumers are not category loyalists. there's a different part for different types of beverage occasions. if you're watching football, maybe you have a beer. if you're going out at night, maybe you have a bourbon. lunch, a mimosa. >> breakfast, scotch, tequila. >> anything goes. >> or vodka that's in the freezer. >> very clean. >> the first one was the demographic for a beer. who's the demo for a craft beer? it's younger. >> it is. it's millennial consumers. craft beer is expensive, so you would assume that consumer doesn't have as much disposable income. if you look at the alcoholic beverage content of those beers, i would argue those consumers are getting more buzz for their buck. >> are the budweisers the huge losers then? if volume isn't increasing but craft beer is taking up so much more. >> anheuser busch has been the biggest.

>> do they buy a bunch of craft beers? >> they have indeed. they've bought over a dozen over the last few years. they're having pockets of success. goose island did an ipa that's done incredibly well. >> what do you need? what's the common theme? got to have a weird name. like fat tire or something. >> and a cool tap. >> then you got to like put some orange slices on top. you got to have some kind of -- but is it really the alcohol? is the alcohol content always higher? >> not necessarily. >> can you get them higher? >> oh, definitely. >> how high can you go? >> you can go to wine levels, low double digits. >> you can't get higher than wine levels. >> you can. sam adams has a utopia line. it's almost like a port. >> what's the margin on the craft beer? >> gross margins can get 50%. very high. >> even with all the money i assume they must have to spend to get this stuff into bars and other places? >> close to half the craft brewers are operating as a brew pub. once you want to get in a store, then your wholesaler and

retailer margins will eat into that. >> so there is a bubble or not a bubble? >> i don't think there's a bubble. i think we're ready for a shakeout though. you're seeing a lot of category entrants because there's a lot of growth. even though growth slowed a little in '15 on a tougher comparison coming out of '14, it's still growing double digits and the category is flat. why wouldn't you want to come in there? the revenue per barrel is 50% higher than, you know, consolation would get on their own beers or coors gets on their own beers. >> if you have four or five beers, you're talking like 60 ounces. >> it's filling. >> it's not only filling, but i'm going to be dealing for probably almost a week. no, actually, but it's just harder. but it's embarrassing. now i'm like sipping chardonnay. vivian, thank you. >> thank you.

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welcome back to box. the u.s. govnment is focused on drug pricing has taken a new turn. meg joins us more. >> the drug pricing debate focus on the eagrgreegregious. yesterday 12 congressmen sent a letter to nhi using a mechanism that would allow the nhi to hold a public hearing to look at the

price of a drug that was developed using public funds at a public university. developed partially at ucla with grants from the department of defense. they say public should be able to reasonably access it and if the price where it's charged in the united states is not reasonable. prices there it's $129,000 in the united states versus $39,000 in january and sweden and $30,000 in canada the. it's really interesting seems to be a new target a new tactic to attack the price of these drugs. it's interesting to see whether this yields anything. this hit medivation drug after this came out. >> it is clear as day that the margin on this is too high.

>> very interesting. some analysts came out. the companies said they would send me a statement. some analysts are coming out saying they don't make a profit. they are barely breaking even. this is not the right place. >> price controls in other countries? >> by price kolls they have single payer systems. i don't know if that's what you mean. >> they can only charge that much? >> if you're negotiating with the government or single -- yeah single system then -- >> they couldn't say no, you can have it even if it was single payer, they can't say no? >> the company. sure i guess they can and wouldn't sell it in that country then look evil because they refuse to sell. >> this study that said that the way they are doing it is creating more problems. >> this is an independent study done by researchers at mount

sin sinai. there's been some questions about these tests. let's go our own envelopes. they cents 60 test subjects. 22 different tests. what they found were issues in cholesterol tests. they did lab corp and quest diagnostics. >> had blood taken at all three places on the same day. >> so you get the pinger fringe versus drawing from the arm. they found that in the cholesterol test it could affect the way doctors can make recommendations. >> terrible story for these guys. >> theranos is fighting saying this wasn't fear. >> that's the response you get every time there's something

wrong with analysis. >> our guest host this morning is walter isaacson. stick around.

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breaking overnight, an egyptair flight hijacked by a passenger claiming to have an explosive device. most passengers are off the plane. we'll have the latest developments. apple off the hook. the justice department unlocking the iphone of one of san bernardino shooters without the tech giant's help dropping its case against apple but we'll see if this battle is truly over. >> in the nba a fan storming the court. but no security was needed for this one. we have the details for this one straight ahead. the second hour of "squawk box" begins right now.

>> announcer: live from the beating heart of business, new york city, this is "squawk box". welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with kick kick and sore. our guest host walter isaacson president of the aspen institute and cnbc contributor and looking healthy and well and i think the key word is aspen institute maybe, 300 days of sunshine a year. >> you have been dol. >> great place. >> the secret is we're based in washington, d.c. we go to aspen occasionally. >> you call yourself a washington institute or move. >> why would we call ourselves a washington institute. >> can you move there or you need all the wonks and stuff in close proximity. >> we need wonks in close proximity every single day. >> fed chair janet yellen

delivering remarks on the economy and monetary policy at the economic club of new york just after noon eastern. just after noon, the judge will be watching. fold by q and a with a moderator. we'll hear whether she's aligned with some of the other fed members that now make it took like there's a couple more rate increases in the offing maybe this year. let's check out futures right now this morning. they've been -- that's about where we've seen them for most of the pre-market session down 37 or so on the dow just under 6 on s&p just ever 6 on the nasdaq. an egyptair flight with 64 people on board was hijacked and die stroertd cyprus. most of the passengers have been released. the hijacker wearing an explosive vest. he's ohold seven people hostage

over a woman. some reports suggest it's his ex-wife who lives in cyprus. we're also learning more this morning about the man shot at the u.s. capitol yesterday afternoon. 66-year-old larry dawson of tennessee walked into the capitol visitor center and was shot and wounded by police after he pointed what appeared to be a weapon at officers. the weapon was a pellet gun. dawson is in stable but critical condition after surgery. we'll be keeping tabs on crude oil prices. the api is set to release its inventory report. analysts are expecting stockpiles to rise to record levels. check out oil prices. wti down another 2%. 38.59. justice department announcing it has successfully accessed the data stored on that iphone associated with one of the san bernardino shooters no longer requiring assistance from apple. eamon javers joins us from washington, d.c. with more on that story. >> reporter: an absolutely stunning development late yesterday as the u.s. government

announced it was taking steps to drop the case. you remember that what the government wanted here, they wanted apple to write new software code that would allow the government toby pass security and get access to sayeds is farook. a third-party that remains anonymous came forward and offered them a technique to get into the iphone. it worked. got in and got the information off the phone they were looking for. we have a couple of duelling statements. first from am saying this case raised issues which deserve a national conversation about our civil liberties and our collective security and privacy. the fbi also saying the fbi cannot comment on the technical steps that were taken to obtain the contents of the issued iphone nor the identity of the third-party that came forward as a result of the publicity generated by the court order. so this leaves the legal

precedent here, guys, in some disarray. there was a court order that mandated apple had to conduct this software development effort to create the software that the government wanted. apple was in the process resisting that. now the u.s. government is dropping the case. one big question here is whether or not the u.s. government tells apple what the security situation is with the iphone because the government will view this as a tool it can use in future cases. apple will look at this very much in a different way as a weakness in the security of the iphone even they want to take steps to patch that as quickly as they can, guys. >> eamon javers, thank you for that report. let's bring in our guest host for more thoughts. walter i ssaacson. you were nodding your head no if the fbi would tell apple. >> the good thing is that this got settled by, you know, some

means either some intelligence agency helped because this was a very hard case. and hard cases make bad law. you don't want this whole thing to be settled on this very complicated san bernardino case. in some ways i think this is good. it gets this one out of the way. and the national conversation on do you want to have things that allow told anonymity end to endencryptien end descriptiend end encryption. >> your answer is what >> i have an answer that won't be popular which is for 250 years we've developed the standard for reasonable search the constitution protects unreasonable search which means the government can't just go in and search your things but with a warrant they can. i believe that you probably shouldn't have major ways of communicating that are beyond the reach of the law.

so if you have a problem, change the law, don't say let's develop saves that can't be opened or phones that can't be cracked. >> have you had this conversation with tim cook? >> no. >> even if you're right, what do you do about encryption and sort of steady march of technology. what joe was talking about. that ultimately whether it's built here in the united states or technology is built abroad. there will be a warrantless phone. >> well, first of all, you can say there will be a battle to try to break some of this encryption. israel will be able to break it. china can break it. it's an arms race. secondly, you know, this notion of a world in which you have absolute anonymity, that sounds

good to civil libraertarians, y can do whatever you want on your devices. plato wrestled with this. he has a ring of guidance. you put it on and your anonymous. nobody knows it was you who said something. the question is, do you have a civil society and rule of law and people can put that on. this assistancing these days thdays. like mobil phones should be separate from everything else in our life. >> you can't legislate that because the technology will move ahead. >> i don't think you can ever get there. it's going be a give and take on technology encryption, breaking encryption. i'm just saying what do i believe generally. the constitution doesn't say you can never search. it's a judicial process to allow

that. >> given the result of what's happened with this particular phone does apple come out on top? do customers say tim cook apple they were trying protect us or damage the brand >> damage because they were hackable. >> look, obviously, i have my iphone. i'm not sitting there worrying that the government might have a search warrant for what i have on my phone. i don't think most people are saying i'll buy but android because apple is hacked. >> it does raise broader questions should i feel safe doing things like banking on my phone. >> no, you shouldn't. by the way, even before they hacked it it's not a great idea to send a whole lot of emails that you don't want people to read or send passwords for your bank. >> is the reputation damaged by the government or because there was a flaw? >> i think they were right to resist the government.

>> so the damage is now we know it was possible to get in. who is this third-party? do you know >> i would suspect its an intelligence agency. >> could be israel. >> there's reports there's a company based in israel that may have helped the u.s. government with this particular phone. back to the original question which you were shaking your head no, nod urge no at. if you are the government do you at any point share how you hacked this phone with apple? >> i think -- >> public policy. there's an argument to be made at some point and i've seen it actually that the fbi laid out some first principles on how to deal with this when they do hack something at some point they actually talked about providing that information to companies to protect them. >> that's when the government had -- >> had cooperation. i think at some point you try to get cooperation. obama went out there. there's been some meetings between the administration.

there's not cooperation right now. >> do you think the government and american companies are at war with each other? >> no. they shouldn't be. in fact hillary clinton's speech out in stanford last week was particularly good about how do you make some grand bargain there. the tech companies will be reluctant to say yes we will obey, we'll make device that make them susceptible to court warrants. it's hard to put that as part of the bargain. but i don't think right now the government is going say here's how we hack the phone. >> we'll see whether tim cook is right. if the cat is out of the bag someone will get from whom ever it was a third-party. apple now is vulnerable. >> apple is very good -- >> then it will be on -- >> it's an arms race. >> just to put it in context the only way to hack the phone is to

physically have the phone. it's not your phone has become hackable to the world and this is one of the points. >> unless it's on the cloud. >> if it's on the cloud -- >> if your data is on cloud it's susceptible. >> your pictures -- >> keep saying i don't have enough storage. >> mine too. >> it's already -- that was always the greet irony. you had it on the cloud they are happy to give it away. >> this is good because it opened up the discussion. >> this is a discussion and i think it is -- >> not going to be unfortunately settled by congress because they will never settle anything. but we have to feel our way here. >> you're not a card carrying member of the aclu. >> i'm not. >> i'm going to join. >> i don't believe in complete anonymity on everything you do helps make a better rule of law.

>> aclu and nra. just to cover all my bases. >> when your phone gets hacked and membership cards are districted. >> israel firm celebrite. is the name of the company. walter will be with us. >> good marketing for that company and you gave them a nice plug. coming up, wall street on yellen watch. what will her appearance today mean for your money. yahoo! on a deadline and could mean a deal by the summer. at the bottom of the hour, anti-tax man, grover norquist. the candidate's view on trade and tariffs.

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but do you consistently get it? you do with comcast business. it's reliable. just like kung pao fish. thank you, ping. reliably fast internet starts at $59.95 a month. comcast business. built for business. welcome back to "squawk box," everyone. take a look fiechs. they have been under a little bit of pressure as we await janet yellen's remarks. you can see the dow futures are down by a 52. s&p down by 9 and nasdaq down by 11. yahoo! has reportedly set a deadline for april 11th to submit preliminary bids for it's internet business and asian assets. the company launched an auction in february after it sheffield plans to sell off its stake in

abby about a about a. starboard value launch ad proxy fight to replace the board. our next guest says pick agnew president, a new congress and a you supreme court justice will only add to the market's anxiety in the coming months. for more on that we're joined by phil orlando. you're stepping way out of your comfort zone on this, aren't you >> i like the political stuff. the reality is i think washington and main street and the economy and all sort of blends together. >> you made a point of talking about the scotus uncertainty as part of the problem. you think at this point the republicans are justified because scalia was an important part of the conservative bloc? >> i do. on the other hand the optics are very bad going into election. even republican respondents to a poll said the republicans ought to at least give the guy a fair

set of hearings and hear what he has to say. >> you pointed out it's only happened in the last 80 years, only justice kennedy. he was the third one reagan nominated. nominated him in the prior year and turned down already two. that's totally different. you need to listen to that wonderful vice president we have right now biden rule. he said it so eloquentally. >> the democrats would do everything based on the constitution as they always do. let's talk about something easer to analyze. that's the earnings have been what people call a earnings recession. the market has held up but did have that 10% plus break. what's the first quarter going to be like? >> poor. our sense is first quarter earnings are down in the

neighborhood of 5% to 10%. >> down? >> down. oil and the dollar will be the biggest problems so those numbers would be at the lower end of that down a couple of percent if you back that out down closer to the 10% if you include currency impact. >> i thought they said 2.5 for this quarter. >> they did. if we were looking at that two weeks ago. yesterday they adjusted that number based on recent data. that number is only .6 of 1%. >> that's unbelievable. they went down almost a point and a half. >> in just two weeks. first quarter depended will be poor. first quarter earnings will be poor. from our perspective there's no way the fed can tighten in the april or june time frame if these are the numbers they are looking at. so some degree we think that's something we would like to see yellen address today. >> what will win in terms of moving the stock market?

the fed not acting or the economy and earnings? >> at this point we're playing defense. as you pointsed out we've had this 12% or 13% bounce in the last six weeks. we think that bounce is getting tired. we expect a correction. from an investment standpoint, you know, we have more cash, more bonds, some defensive allocations in terms of stocks. we expect to have a consolidation. >> you think at this point the chance of hillary clinton becoming the next president are what? >> i think this thing is still completely wide-open. >> you don't know? >> i'm not happy. >> that solves your scotus problem. why blow your chance, to use your expression, on a 64-year-old moderate. that's why you know obama wasn't serious about this anyway. he want as 40-year-old progressive. you know he threw this up as a

decoy. >> it's all politics. >> he doesn't -- he wants somebody who will be progressive for 40rks 60 years. >> republicans should go and vote him in. >> the republicans should go ahead during may or june ahead of the convention and at least go through the protocol of having the meetings. >> check the polls. >> exactly. check the polls. they can come back in the lame duck. once we get to the beginning of august everybody goes home to run for re-election. they don't come back again until after the re-election. at that point they can pull the trigger one way or another depending how the elections went, how judge garland's interviews went and make their best decisions. >> because there's a feeling among elite, walter, that hillary has won already. >> oh, absolutely not. i'll say one thing, judge mer

measu measu merritt garland. he's not another scalia. >> still a center right country. >> he's a good smart open minded guy. and it's a shame politics twirled it all up. >> every time they pick someone ends up not being the conservative that they hoped for. >> judge roberts. >> roberts, exactly. >> you are are renaissance man. >> coming up the hug make headlines. but the knicks and their dismal season. as we head to the break check out the markets in europe. "squawk box" returns in just a moment. ted over 100 years ago as a benchmark for average. yet many people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average.

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. welcome back to "squawk box". what kid doesn't dream of meeting their favorite player. one young player made that happen at the knicks-pelicans game last night. >> pelicans, nobody runs out on the floor. designee ran on the court and gave carmelo anthony a hug.

carmelo gave the kid a pat on the head before he was ushered off the floor. knicks are 30-45 and miss the playoffs for the third straight season. >> carmelo is pretty cool. >> pretty cool. >> new orleans fans go out and hug the knicks player. >> wasn't that new orleans has a team called the pelicans. >> they were called the jazz. jazz moved to utah. in utah they kept the name jazz so we didn't get the name back. >> they should change to it something. outwhat would they come up. >> i wouldn't give them pelicans. there's no pelicans in utah either. >> coming up, serious charges

for stealing millions. >> taxes, tariffs. we're in the red with the dow opening off 54 points. we're back in a moment.

welcome back to "squawk box". among the stories front and center at this hour, seven people remain aboard an egyptian jet that was hijacked to cyprus. the hijacker has no real tangible demands. some reports said he wanted to see his ex-wife who lives in cyprus. he demanded the release of female prisoners in egypt. justice department has extracted data from an iphone belong to one of the san bernardino shooters. it's dropping it's suit against apple to help crack its iphone encryption. ending the debate for now. we'll get a fresh reading on

home prices at 9:00 a.m. the kay schiller report for january, congress expecting the report to show a 5.8% increases in prices. a former partner at a unit of the boutique investment bank pjt partners has been arrested on charges he stole $25 million from investors and tried to take 70 million more. this guy should have been rich already. his father was loaded. where is the school, is it yale or harvard, one of the buildings is named, like a casperson wing. he posted a bail of $5 million on criminal wire and security charges. and employee at park hill group which seasoned by pjt and is a spin off of blackstone, pjt has fired casperson for cause and initiated an internal investigation and shares tumbling.

his father, i guess, committed suicide before it was known that he had a huge tax evasion problem as well. the philanthropist and wealthy guy who didn't go out in the greatest way. >> shaking up the upper crust. >> it is. are you a scion? what is that? it's a car. it's a crappie looking car. >> many, many initials after it. >> is that what is it? >> yeah. sounds like an engineer. >> okay. >> train engine? >> yeah. let me blow the whistle. >> my brother is the fourth. he's not a scion. >> his son is the. >> that's confusing because you go from junior to second don't you? the second is the third, right? >> figuring out --

>> second is the third. >> we had a first, second, third, fourth. >> what happened to junior. >> never went with junior. let's talk taxes, trade and tariffs all a big part of this election cycle. fred smith talked about how he thinks trade is making america great. smith said history shows trade made easy, affordable and fast, always budget more trade, more jobs and more prosperity. political candidates are running from free trade as americans feel those trade deals have left them behind. grover norquist is the president of americans for tax reform and grover great to see you. it's bean while since we've gotten to talk with you. absolutely. >> what do you think about these arguments about free trade? where do you come down? >> we have a lot of challenges. our corporate rates are at 35%. we compete in a world where the european average is 25. we're doing damage to ourselves.

this misdirection to be matted at the international trade, mat at chinese when our politicians shoot us in the foot. fix the tort laws and people won't be winding about trade. let's get our corporate rate where we can be competitive in the world and not wonder, you know, shouldn't we have more tariffs. house of representatives reducing the tariffs on american people. our own high rates. it's a misdirection. there are problems. there are problems our government created. can you fix them by stop doing stupid which is our presents tort laws where billionaire trial lawyers get to sue everybody and we pay for it with more unemployment and lower wages and our companies are taxed in a way that drives them overseas, or allows them to be bought overseas because they are worth more as a british company than an american company because of our laws. not because the british did something but because our government did something stupid. >> it's nuance. >> tough argument in a populace

election. >> we all want corporations to do better. and that's what the free trade allows. but if labor on the one shand really cheap every where else, and the tax laws aren't fixed every where else then the corporations end up benefiting from the free trade but the workers don't and that's why you got this populace anger rising. and rightly so. but you make it nuance. at least what we should do is lower the corporate tax rate so the labor is always going to be cheaper somewhere else but don't have a double whammy. >> it's not a question of wages and cheapness it's productivity. can you always hire 4-year-olds very inexpensively. they can't do very much four. what we want is a highly trained workforce that's well paid. we don't want to be the lowest wage nation in the world i want to be the highest. what fred smith points out you focus on what made us great to

begin with. and we had in the 57 states free trade. we're the largest free trade bloc in the world and that's what's allowed to us really do well we expanded that to mexico and canada we've done better. we would do better more free trade benefits the united states as long as we stop inflicting pain on ourselves through the political process. >> grover, this is walt isaacson. good to see you again. you're famously anti-tax. do you think a tariff is just basically a tax on people? >> yeah, tariffs are taxes. tariffs are taxes on american consumers. tariffs are not paid by chinese people. they are not paid by french people. american tariffs are paid by american consumers when you go walmart and try to buy something tariffs make everything you buy from underwear to more expensive and our country, the largest tax

that americans paid for most of our history up until the invention of the income tax which was not progress was the tariff. in 1830, 30 years before the civil war south carolina called out its militia because the tariffs were so high that they were hurting consumers and the tariffs were reduced as a result. we used to have arguments over the tariff in this country which was the tax in the same way we have arguments about the income tax, replacing, putting up higher tariffs is a higher tax on consumers and frankly on workers because workers are consumers. >> what do you think about donald trump's proposal -- >> who has it best. >> 45% tariff on the chinese as a negotiating tactic? >> look, in the last part of that sentence you may have made it make some sense. as a negotiating tactic. i want a better deal. look, a number of countries don't treat our intellectual

property as they should. a number of them have nontariff barriers. they say we won't tax you but make it tough to get in their markets. we pull this trick too. we need to get nontariff barriers and barriers down. tough negotiations yes. to the extent what trump saying i want a better negotiated deal that's fine. but organized labor has decided going back to the clinton administration they were shutting down the doors on all deals. and that's the challenge. if hillary or democratic house in the senate and free trade finished at least with the republicans you would have a shot at trying to get something across the fish line but i think only after we get better growth with lower taxes. >> who speaks the grover language best? how many candidates should we say there are. let's say bernie, hillary, trump, cruz and kasich like 3%.

who speaks the grocer language. speaking the language and actually walking the walk. who do you think is speaking the language and who do you think would walk the walk? >> nobody speaking the language. nobody is making the case for comparative advantage. nobody is making the case that economic liberty is good for the united states. when people are bad mouthing the united states because our economic growth has been 2% for seven years as posed to reagans at four plus percent. people are grumpy. it's hard to say we're the best in the world. we're not feeling that way. so all of them i think have the lousy rhetoric because they are focused on the wrong thing. the end of the day i do believe a republican president would sign a trade expanding bills and i think they should scream and yell and make sure everybody in america understands that they are good deals for america. not just for the world but for the united states. freer trade, more open trade

benefits america. >> grover, would you put the candidates to the same test on tariffs that you do on tax? would you ask them to sign a pledge that says they won't put in tariffs or would you just consider that part of the anti-tax pledge? i ask that because trump himself has said the 45% tariff is a negotiating plea. what if it gets down 15% tariff or 10% tariff. is that okay for you if you negotiate a better trade deal as a result? >> i would argue that if you're going to raise tariffs somewhere -- raising tariffs is because you just lost the negotiation. you didn't get a deal. okay. you didn't get trade expansion. tariff increases are not part of a free trade agreement. that's what happens when you lose the trade wars follow. you going to hurt the american consumer with tariffs you need to reduce the income tax or other taxes somewhere else or a

net negative for the american economy. we have a free trade zone in the whole country. that's one of the reasons we do better than the europeans. the europeans are trying to come up with some sort of free trade zone within their own european union. we've just done it better and longer. >> grover, i'll have a foum ll up on joe's question. ever since i took economics in college, more trade is better than less, free trade is great. nowadays the is there some reason to rethink that orthodoxy when the american middle class has been so hollowed out. >> the answer is no. free strayed good for all consumers and all producers in the united states. there are things we've been doing. we've been increasing taxes on people, we've been allowing the

trial lawyers come in and destroy industry after industry. we've gone anthony war with real energy and set up a fake alternative crony capitalist subsidized energy system instead of the real energy producer that we do have in the country. you can't do that to west virginia. democrats have had a war on coal which hillary says she will continue. which is greatly damaged west virginia, ohio, pennsylvania, southern illinois. do you that -- that's not trade. that's our government deciding they don't like -- the liberals in our government saying they don't like coal miners because they are icky and they don't like people who frack. hillary clinton decided if she's elected there will be a war on uber because she wants to crack down on independent contractor arrangements which is how you become your own boss. this next election is yes or no on sharing economy, on uber, on

air b and b because the unions don't like for you to be your own boss because then you can't be forced to pay union dues. taxicabs can be unionized, uber no. this is an opportunity if we keep the independent contractor laws intact, we don't need an uber, we need many ubers in many industries to give us more flexibility in the entire economy so we can continue to out compete the rest of the world. shutting the borders means you didn't notice the rest of the world is gaining one. we want more open borders on trade in both directions but the government has to stop punishing the american economy and put people out of work. a war on coal miner, which we've had now for 1220 years is destroying whole towns and counties has got to stop. >> grover, thank you for your time. >> thank you. >> good to see you.

>> coming up this morning's top stocks to watch plus a volcano erupts and then disrupts air travel. some amazing video you need to see next on "squawk box". as we head to break check out the price of crude oil. "squawk" returns in just a moment. every year, the amount of data your enterprise uses goes up. smart devices are up. cloud is up. analytics is up. seems like everything is up except your budget. introducing comcast business enterprise solutions. with a different kind of network that delivers the bandwidth you need without the high cost. because you can't build the business of tomorrow on the network of yesterday.

welcome back to "squawk box". an update on a developing story out of cyprus. started in egypt. cyprus police now say that the egyptair plane, the hijacker himself has been arrested. he hijack ad flight from egypt to cyprus. we're going bring you more details on this story as they develop. bizarre. his ex-wife or something is in cyprus. >> according to some reports, you always have to question some of the early ones. yes he wanted to see his ex-wife. >> we think. there's some other stories he wanted some female prisoners released. we don't know what the real story is here. >> sounds like a needy individual. he wants his wife. i don't know. i don't know what's going open.

some other outlets said -- then they called it a romance. >> was this a romantic hijacking. >> i got to get it from "the guardian". >> "the guardian" quote is unbelievable. it has to do with a woman. the egyptian ministry of foreign affairs told "the guardian" he's not a terrorist he's an idiot. >> i had that same quote, i saw it attributed to egyptian air official too. >> was he able to get a suicide vest on the a plane? >> they said it was a belt. >> they weren't sure whether it was. some reports were there weren't any explosives. >> i'm not sure i want information go through airport security wearing explosive vests. >> there's been conflicting reports suggesting he did not

have them. just fooled them into thinking that. >> he wants to reunite with his wife. not to split with his wife. >> this is a very complicate prod sees. >> like the shooter at the capitol. lots of crazy people. >> does that sound like death by cop suicide? if you point a gun at someone, at the capitol building. >> at the checkpoint. don't you think they will shoot you. >> that's why its problematic to make policy on anecdotes. we have some event and then let's change thing. people are weird. present company excluded. all right. when we come back this morning a check up on the global hot spots in the hot race for the white house. will the gop try to stop donald trump during the convention. we'll jump into that conversation next with walter isaacson. (patrick 1) what's it like to be the boss of you?

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at all to terrorism. our guest host this morning is walter isaacson. president and ceo of the aspen institute and a cnbc contributor. walter, this one, obviously s-very different from the attacks we've seen in belgium, from what we saw in paris, from what we saw in lahore over the weekend. tom freeman was here recently and laid out the thought the world is divided into chaos and order, and it does seem like chaos is gaining some ground. >> this is tom's new book. i wouldn't put this anecdote this weird one into the whole thing. but we had for 70 years a pretty clear cold war order and then post-cold war order defined by nato. there was nation states, you know. nato protect it. we're now entering a whole new world and we don't that have tools to deal with it. 70 years ago they created nato to stop this soviet brand of

communism and tanks coming. nato is not equipped to deal with tom freeman calls the disorder of this world. so you need some new alliance. that would be an international anti-terror organization that would share intelligence, that would have military capabilities, that would have just like we invented radio free europe and some public diplomacy capabilities. >> do you think it's possible? don't you think that what's happening in europe will divide europe more than bring everybody together? >> i don't think europe will hold together partly because immigration and nationalism have risen. >> which makes the security story even harder. >> makes the security story harder. the fact that the europeans are not sharing intelligence well is a frightening thing. one thing the european union should have been able to do, that said good american leadership created as we did with other agreements in the

late 1940s, the nato and marshal plan and world bank time of agreements that's what the next president should be talking about. >> do you think there's a candidate capable of that? >> other than joe kernen? >> you would be on my ticket. you want to be on top or bottom. >> i'll say something that may not make me popular on this set. hillary clinton has talked about serious things. it's hard to talk about serious things in this election. but i think she has laid out some serious proposals. you can have all sorts of arguments on your set about her, but we need more candidates laying out what are the future proposals. >> walter, when we had freeman here we also talked about the discussion now between whether it's a cult isis or whether it's a fairly large number of muslims that believe in the radical form of islam.

and tom tends to believe if it's half of a percent or something it's understating the actual problem. i was just thinking about that. if we had solved the problems in the middle east that i remember going up, i remember anwar sadat and begin and carter and trying to deal with this intractable problem, occupied lands. if we had solved that would this have emerged at this point? would islam, would that religion have gotten so anti-western or part of it. is that where the disenfranchisemen has come from. is that the root cause? >> there's no one root cause but can you go back to 1950 where people drew lines in the sand that beared no relation to the "entertainment tonight ethnic and tribal lands. >> we got ghettos with people

who aren't assimilated. >> it's going to take -- >> how do you change hearts and minds. >> takes that whole quiver of arrows from military to intelligence to public diplomacy and propaganda and you're not going to solve it. it's like the cold war. it took 50 years to solve that. we're in for a long twilight struggle. we have to put tools in our tool box.

counting down to janet yellen. fed chair set to speak about the economy and monetary policy hours from now. wall street on edge ahead of her remarks. moving on without apple. justice department unlocking the iphone to one of the san bernardino shooters with respect where does the privacy versus security debate turn next. do you have the need for speed? the rob report rolls out it's top super cars for actual tradition rich. bring your big bucks as the third hour of "squawk box" begins right now. >> announcer: live from the most powerful city in the world, new york. this is "squawk box". welcome back to box here on cnbc, first in business worldwide. i'm becky quick along with joe

kernen and andrew ross sorkin and our guest host is walter isaacson. we're less than 90 minutes from the opening bell on wall street. futures have been weaker. dow by 42 points points below fair value. s&p off by five, nasdaq down by six. take a look at the markets in europe and you'll see similar trends. the markets have come back. dax is flat so is the ftse. skak up . egyptair flight with 64 people on board was hijacked and die stroertd cyprus. the hijacker has been arrested. he claimed to be wearing an explosive vest and took over the plane for a personal matter involving a woman. we don't know much and there's a couple of different reports. we'll try to get it to you. yahoo! has seat deadline of april 11 toth submit plame bids

for it's internet business. yahoo! could close the deal by june or july. activist investor starboard launched that proxy fight to overthrow the board. that pressure seems to be working. markets will be paying attention later when fed chair janet yellen delivers remarks on the economy. economic club of new york that speech will come just after noon eastern time to be followed by q and a with the moderators and steve liesman will be there in person, correct? >> no. actually. the logistics are such it's easier to cover it from the office. it was a thought. it's tv, right. there's not space. . >> i thought i saw you in the city. she's in the city. >> it would make sense. >> i assume you'll have lunch afterwards? >> i will have lunch in the cafeteria. 0 for 2. >> why don't you tell me the atlanta fed went down to below

1%. >> i was on air yesterday three times with that number. >> was it after this? was it after this show? >> it was after this show. because the personal income spending. >> they were early last time with downgrading growth estimates and then they were higher than everybody else because they said like the inventory was -- i thought, okay. >> they have some strange stuff going. >> now they are below everyone again. doesn't that downgrade. . >> you know what sandy is doing in the background. he's screaming. we keep talking about this later. absolutely. >> you know what he wanted me to do. >> what >> watch. >> i love you sandy. >> this is important at 8:03. a few stocks on the move this morning. home builder lenore is beating the top and bottom lines. it earned 63 cents per share.

10% increase. that's it. it's a home builder. put that in your quiver. 12% rise in deliveries which is rise because the housing data wasn't great the other day. >> pending home sales was good. pending was good. >> and, and i use this in royal week because i haven't watched these shows but it says we're watching shares of e-bay and linked in. barclay downgrading these stocks citing weak fundamentals in e-bay and consolidation for linkedin. foot locker is going to join the s&p after the close of trading on friday. >> mark your calendar for that one. it will replace cameron international which is being acquired by -- now can i talk is now >> no. we have other news. would you behave? >> for a moment. you say that ike austin powers.

>> behave. >> justice department announcing it's unlocked the iphone used by one of the san bernardino shooters without any help from apple. josh lipton joins us now with reaction from silicon valley. >> reporter: two ways to interpret this news. on one hand you can see this as a win for apple at least in the court of public opinion. apple never compromised when it came to its core principles of protecting the privacy, security and safety of its customers. tim cook made it clear he would never force his engineers to write unique software for the government which he said would set a dangerous precedent and apple in a statement following doj's announcements saying apple believes deeply people in the united states and around the world deserve data protection, safety and security. sacrificing one for the other only puts people and countries at greater risk. we know a vulnerability has been

discovered. how concerned should iphone users be. but patrick moorehead said we don't know what method this outside source used or what type of iphones it will unlock. does it unlock this one or every iphone. apple's next version of its mobil operating system will be more secure and hard to exploit and without any direction from congress or the court apple and doj will likely be back in court arguing about another iphone in yet another case. becky, back to you. >> not just apple. probably the tech community at large versus what the government wants to do and there's probably saying this is a discussion we need have and a decision we need to reach on a broader forum. >> reporter: that's true. ultimately, listen, really it's been described to me as a temporary cease-fire by

technologists. that's what you saw. you can see how the fbi will want to get access to the iphone 6, 6s, much expected 7. we could be right back in court unless congress gets involved or a court decides the act can force a tech company to weaken its own products. you expect apple and doj to be right back in court over another case, guys. >> josh it's walter isaacson. it's more than just about iphones and the hardware. you have end to end encryption with apps, services and phones. if you talk to the intelligence be officials in washington they say that's their biggest problem in fighting terrorism is people use end to end encryption after trying to recruit people. first of all, do you think that's a valid argument, and do you think that's a discussion that society and tech community and government need to have?

>> reporter: well, i would argue it's even broader than that. frankly when you look at where technology is headed, all these tech companies are moving towards creating really unhackable, unbreakable devices. that's where the technology is headed. to your point that then is a larger discussion that you do need to have as a national community, unhackable, unbreakable devices, that's something we want because guys that's where the technology is going. >> josh, thank you. >> can i ask josh one question any anxiety in cupertino the government will come out with any information found on the phone that's damaging to apple in that they may say we found information that helped our investigation or we have found another cell or would have led us to something? >> reporter: what cupertino would be most concerned about no technology company will ever say their system can't be hacked because it's not true. what a technology company will always say we'll try to contain that vulnerability, issue a

patch as fast as we can, protect our users. i think apple lawyers have already said we would hope the government will share this vulnerability so we can correct it but that relationship at this point is so strained you wonder if that's going to happen, guys. >> all right. we had steve liesman here. you're like a -- you have a lecture to give. you have information you need to get out. >> in part >> you're the professor. so now you got material that needs cover and i can't ask you anything but the encryption debate. >> the encryption you have on three hours is very onerous. i want to get thought. we have these exclusive results on this very debate from the cnbc survey. apple wants this thing to continue. and maybe one reason why is because it knows it has the public support for its position and these results floored me.

cnbc economic survey we asked 806 americans around the country if they favor encryption because it protects consumers data from criminals and from being read by the government. or do they oppose encryption because it allows criminals and terrorist organization to communicate secretly and hinders law enforcement. note we used the word terrorist posed and didn't use apple's name. we didn't want to bias the question in favor of apple. >> i couldn't choose either of those. >> the vote is yes. >> we give the option of yes, depends or both. look at the results. wait until you see. 57% support saying tech companies should sell the software. only 28% pose. because we were the first news organization to ask this question in december we have comparative results. these results have gone up in favor of the tech companies and cue the kunbaya music it crosses

party lines. it's not republican versus democrat. when we look at this by party lines, republicans and democrats, their support increase from december to march, independents are about even 51, 52%. only real differs is by education. lower the education level the less support you get for tech companies. but still in favor of it. that was exactly the response i was hoping for. let me tell you about data. survey has a margin error of plus or minus 3.5%. we did it last week. we conducted the survey or three days, monday, tuesday and wednesday. what happened wednesday brussels attack. we looked at the results by day. no change in the support for encryption and the tech companies after the attack as before. so it did not alter it. >> doesn't alter. >> andrew, love you death you're on the wrong side of the public on this issue. i wonder if this is catching the wave of anti-government that's

out there. but the idea is that they support their own privacy. we use the word terrorists in the opposed part and they still chose the other one. that's what i was here to say, joe. >> andrew would say no one of went broke underestimating the intelligence of the public. even your democrats are skewed more than republicans. >> that's interesting. >> you're getting shrill and loud. >> we need to re-evaluate what we believe is politically palatable. if you want encryption that's one and if there's terrorist acts that's something we need to end up living with. >> my guess is that -- >> freedom is not free. >> public relations winner and probably overstepped their bounds by asking for the software to be written instead

of just asking for help. this explode publicly. for decades companies have been helping law enforcement. >> we need to find the cause. we need to find the cause for freedom. freedom is not free. >> i was flipping around. i don't understand somehow -- >> four dead in ohio. penn state. >> that's something i'm lost on. >> you're lost. remember what gary cohen said. >> you think like land lines, mail should all be encrypted. >> don't take to it the absurd. >> josh had the right comment and that's the technology is way ahead of all these discussions and so if you're going legislate against technological advances go for it. >> that's railing against the tide. congress this, will never -- >> there's nothing there when you open it up.

open it up and it will be gone. we have to stop terrorism in other ways. freedom is not free walter. you're not an aclu -- >> what about the nra? >> i think we already -- coming up when we return opening day for the yankees fast approaching but a cable standoff heading into extra innings may keep thousands from seeing the start of the season. we'll break down the sports with a media vet. robb report unveiling top cars of 2016. ent management, we believe in the power of active management. by debating our research to find the best investments. by looking at global and local insights to benefit from different points of view. and by consistently breaking apart risk

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opening day for the yankees is less than a week away. putting a standoff -- okay that's why. i could have said the reds. putting a standoff over the yes network that airs its games. julie boorstin joins us now with more. >> reporter: joe, the yes network is owned by fox. they have been lock in a standoff over fees since

november when comcast blocked out the yes net woerng sprush on for them to strike a deal ahead of moan's opening day. comcast points out it serves less than 10% of the overall market. saying yes is the most expensive regional sports market in the u.s. and trying to increase its prices. a spokesperson for yes network responds hands down yankees telecast on yes is among the most popular sports programming in the u.s. and consistently among the top three rated services in the new york area. this standoff speaks to tv distributors focused on rising sports costs which account for more than a third of the average capable bill. yes isn't the only network dealing with push back over rising costs. after an ongoing dispute of the dodger network here in los angeles time warner cable which

distributes the network folded last week. >> thank you. let's bring in david sternberg founder and principle at sports media consulting. he has held executive positions at fox sports universal, sports and manchester united and normally in the past hasn't contend always -- doesn't the other side usually fold? >> well, you say that and content historically has been king in the sports business. but i think we've reached a bit of an inflection point particularly with regional sports networks where distributors feel emboldened is enough is enough. we have four regional in new york, five in l.a. >> regional is not the same as nfl. >> no. very different. important distinction to make.

the national sports rights marketplace is still vibrant and very healthy and still going to see a lot of competition not just for nfl rights but for other major leagues, national rights packages, some big college conferences. what's happening with the regional sports networks is you're finding certain markets, not all of them where the cable companies are saying there's a new network coming in, we've already been paying for these rights on another regional sports channel, this is just going to add $5 to $10 every month to skurconsumers bills an we'll take the risk of not carrying that and how many of our subscribers switch away from our system. >> you think that's the right move? >> for them there's a lot of logic in that because what has happened in the last couple of years is as you've seen in los angeles, directv who is not carrying the dodgers network hasn't lost that many subscribers in that marketplace.

they feel like the calculus is somewhat in their favor at least holding out for a little while to get a better deal. >> will these networks move to another tier and whether it becomes a sports tier and includes the espn. and teams in terms of the model have based on the idea you can keep charging more money. what happens long term? >> if that model evolves to what you just described which is basically an hbo premium service it will have a significant effect. >> is that realistic. >> they've been talking about that for years. interestingly that's where a lot of sports networks started 20, 25 years ago. sports channel, msg those were premium channels you had to pay an extra fee for. over time they became part of the basic cable package in the bundle. it's difficult to unscramble that egg but i do think going

forward there will be some push in that direction and you're already starting to see that, you know, some subscribers are cutting the cord or shaving down the cord because they don't want to continue paying $100 a month. >> how much did they used to charge? >> in the early '90s when these became sort of basic cable channels they were probably -- >> how much did espn charge last year >> $5 plus. >> how much do they want? >> that's wholesale price. >> what do they want now >> they want something at least that high. whatever it is. i'm sure they are. >> this is straight yes situation. meaning one of the other things in these media conglomerates because they own these other networks they can use that as leverage to force cable operators to take other networks that they might not otherwise take or take them at a better price. >> sure. this is fox versus comcast. there's a lot of pieces. >> other networks that are a

part of this? >> no. this is a yes deal. fox bought yes, previously yes had done all their own distribution agreements. is that deal that fox has inherited. having said that there will be horse trading. comcast is on the other side of this issue as well because they own regional sports networks in other markets too. >> do you think it's because cord cutting has actually kicked in enough. >> that's one of the factors here. the overall cable universe has shrunk by 7% or 8% according to nielsen in the last five years. >> you keep putting $5 on the bill. >> you're asking more cost to be borne by fewer subscribers. there's some pressure around that. also just a function of the proliferation of rsns. when you get a situation in new york where there are five regional channels, l.a., same thing, it's somewhat odd. >> the digital revolution basically has allowed people more choice.

but in this case it's pretty hard to choose not to get all these regional sports networks at five bucks if you're somebody that wants it. >> if you're not a sports fan the alternative of getting entertainment programming elsewhere is a good option. >> the mets are what people want to see this year anyway. it's not going to be the yankees. >> there you go. the mets are on comcast. no problem there. >> don't forget that. comcast. check your local listings. unscramble an egg. put agagenie back in the bottle. horse has already left the barn. you got one? which one do you use. genie back in the bottle. toothpaste back in the bottle. >> unscramble an egg. >> impossible. >> unring a bell. that's not bad. viewers?

@joesquawk. tweet me. next coming up hold the phone one wireless carrier launching a range of plans for those who don't use phone part of their device. i don't know who that is. people who have no friends at all. or facebook earth. those details next. yellen watch. the hawks are circling. can the fed chair quell the mini revolt inside thing central bank. steve liesman, haven't seen him in a wild. he'll be back to tell us.

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welcome back to "squawk box". here's what's making headlines at this hour. a man who hijacked an egyptair jet from egypt to cyprus has been arrested. no passengers or crew are reported to have been hurt in the incident and some reports say it was a love sick hijacker. i love sick hijacker. wanted to see his ex-wife who now lives in cyprus. others say he was demandsing the release -- this is just a bizarre story of some female prisoners in egypt. so draw your own conclusions. i'm not sure. i think andrew had it best from "the guardian," he's not a terrorist he's an idiot. >> that was a quote from supposedly a foreign ministry

official. >> ian bremer tweeted it was an egyptair official but an official from some place. >> a bidding contest out for virgin america. jetblue and alaskan air releasing bids. san francisco fed president john williams says monetary policy may be boring and i'm not even going to say going forward, going backwards, going forward. he says the fed's plans for rate hikes have been steadily and consistently at the rate of increases will be thoughtful which is good to know. ever get tired of covering that speech when you hear stuff like that? >> yeah. >> the reaction in the market may be anything but bore field goal the fed does decide to go ahead and raise rates sooner rather than later. you can see this morning the markets have been weaker

throughout morning. dow futures are down by 47 points. s&p futures off by six. nasdaq down by seven. obviously the markets awaiting to hear what fed chair janet yellen is getting ready to deliver in her speech the evidence economic club of new york. that's coming this afternoon. wall street is wondering will she acknowledge wall street's mini revolt. steve liesman joins us now. >> i want to go back to what joe was talking about at the top of the hour regarding the economic data because that weighs into what janet yellen will talk about today. yesterday on this show at 8:00 we got the personal income and spending data. showed a big revision downward to the consumer for january. flat in february. it cause ad big revision across the street about, for the first quarter gdp. you know we do this cnbc wrap up. we do an aggregate of all the people on the street.

>> did i? >> you do. you do now. take a look at the results. across -- everybody took it down by half a point. you can be in this job for a very long time and not see a single piece of data bringing down gdp. we're tracking below 0.9%. we were up above 2% when we first started thinking about first quarter gdp. now we're running below what the fourth quarter was going to be. i want to show you some things. we'll get through what joe was asking about. atlanta fed one of the ones out there. they took it down 0.8%. mark zandi they these gdp numbers are terrible. he think the jobs numbers are better. he thinks that's what's going on in the economy. there's a bufrmg of cross currents if you look what yellen has to deal with today. april rate hike idea brought up by four or five presidents

versus doing it some time later june or september. you got global growth versus u.s. growth. gdp tracking below 1% but who -- for $100 what was the number for jobs last month? 242,000. well done, joe. that's a number. that suggests gdp at 3%. okay. but if you talk about 0.9% gdp number you should be doing jobs around zero to 100. >> due agree with mark zandi that the jobs number is better. >> i agree with every economist i've spoken to. when the two numbers conflict the jobs number is a better indicator of what's going open what we presentsed last week the variance in the gdp numbers are huge. >> phil orlando was on earlier

saying corporate profits will be down 5% 120% in the neto 10%. >> corporate profits have been doing better. it's worthwhile to take a look at that. i saw 6% up ex-oil. has anybody confirmed that number. that's what i heard from somebody. i think companies will figure out a way to get back to being profitable. i think they had a shock from the there are, a shock from the overseas growth. they will figure this out. the question is whether or not we can get all the cylinders firing at the same time. you have an interesting issue with inflation. the core number running above two. >> that raises rates and you'll see another shock from the dollar. >> that's the problem. you keep the hearing idea from some fed officials they don't want to get too far way from their johnson brethren and other

central bank colleagues. >> once earnings season begins how which they feel. >> once we get past yellen we get into earnings season. i like the idea the market gets focused. i hate it when its in between economic data and earnings season. >> the earnings recession and the weakness in the economy have always matched up and what didn't make sense was the jobs. so you got two strikes against you because earnings haven't been as great. >> earnings isn't bad when you think about ex-oil. >> what was the other thing? here we are again in this first quarter. >> this lousy first quarter. >> also after seven, eight years -- >> hopefully it gets better after here. >> we'll get better. fed forecast, all along. 3%. all along. >> not happening. >> we always end up with 1.5%. something is rotten --

>> in denmark? >> there's an idea out there which you should know about which is that the fed's very policy that creates these things when it starts move to it creates the reality. >> we'll continue this conversation in just a minute. when we come back new data on small business hiring right after the break. later speed and money break down of the top cars of the year. from one of the leading voices in luxury. "squawk box" will be right back. i asked my dentist if an electric toothbrush was

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clean versus sonicare diamondclean. my mouth feels super clean! oral-b. know you're getting a superior clean. i'm never going back to a manual brush. welcome back. new data just breaking about small business employment in the united states. the latest paycheck ihs survey shows march index best three month increase in two years. joining us right now to take us inside the results is ceo of paychecks. what do you think is happening here? why this increase? >> well, i think we're seeing a nice expansion particularly on the coast, becky. we're seeing, you know, other services up pretty strong. discretionary type spending. we're seeing construction while down a little bit still pretty strong on the index level. the regions in the states are kind of split.

it's the coast where we're seeing the best jobs growth and small business and the central is where we're still hurting from the energy kind for cuss states right from texas right up to the dakotas. so i think the good news is that as you said the first quarter has seen the biggest increase. expansion of small jobs in two years. >> you said the mid-atlantic is the one that stands up going way up. why did that happen >> mid-atlantic suffered pretty badly here the last couple of years. i think what we're seeing they came from a low point to high point. new jersey took a long time to see some foreclosures in housing take effect. takes a long time to get through that foreclosure process. so they took a big hit and now starting to come back. that's coming from a low point to a recovery. >> we've been having a debate on stoet try to figure out if the latest gdp numbers are accurate or if the jobs reports, the reports that we've been getting from the government are more reflective of the economy and

based on what you see, what do you think is in the right direction? gdp weak? job numbers have been pretty strong? >> i feel better certainly about the jobs numbers. because i think, you know, the only thing i temper that with, we've seen a big increase in part time jobs. that could have some impact on what really is the production that's coming out of this. we're seeing other services, leisure and hospitality, that's where a lot of increases in small business jobs are coming from. while that's good to have jobs part time employment is a portion of total employment has come up from about 5.5% to 9.5% of total employment. i think part time, you know, while it's good to see the jobs come back some is part time. >> is that because of the economy things like uber and everything else. is that really affecting the jobs numbers yet? >> i do think that's starting to have some impact on it. we're certainly seeing more part

time work, alternative work schedules where people are sharing jobs. other small businesses, there is more alternative job working, you know, set ups so that people are doing alternative jobs instead of just full time. millennials seem to want more alternative work schedules. >> is that good or bad? >> well, it's a good question. i think, you know, certainly we would like to see more full time jobs. while we've seen some we would like to see more. the fact that businesses are just to compete they are offering different employment work schedules and if that's hiring and keeping people in employment i think that's a good thing. it brings morgan in, they are spending more, that's going make the economy stronger. >> the per economy really is just uber. make this gig economy which we talk about, the uber economy doesn't exist for this one single company and maybe air b and b or something like that. >> yeah.

i don't think so. just the fact that part time employment in total in our numbers from small business one 50 employees has gone up 4 percentage points in three years is amazing to me. almost 10% of employment now is part time based on our results. i think it's much more than uber. we see it in business today. we see younger people today, millennials want more alternative work schedules. i think you'll see it through all businesses. not just an uber thing. >> marty, keep your eye on the california experiment with $15 an hour. all right. will you put some listening devices out there. it's going to be an. sperm we can all watch. fit works out there i don't see why we don't just go $50 an hour for everybody and just make sure everybody makes like a couple hundred grand a year. that seems like a good idea to me. let's start 15 on our way to 50

or $100 an hour. >> i don't know about that. i think that will hurt employment. >> let's check. people say no. so once we try 15 let's -- i don't know. what's a million a year. make everybody a millionaire and there won be any more income inequality. >> i understand. one thing that's interesting seattle is number one and seattle has a $15 minimum wage. heading that way at least heading that way. that's in the city itself. >> we get to watch. >> marty before you go. we went back to this uber economy. i'm looking that. it's estimated online workers represent .5% of the entire labor force. a stewy released in 2015 saying workers account for less than 1%. separate study by jpmorgan said.4% americans make money from gig jobs in any month.

>> i don't know. that's a low number. when you look at small business what we're seeing part time. depends on how they defiant. but part timesup is up dramatically. alternative work schedules, sharing of jobs all that stuff. >> we do have an increase in 1099 economy. >> that's true. >> but one small thing here the bureau of labor statistics used to track this. it got decimated eight years ago. there's not been an employment survey on this. be useful for the bureau of labor statistics to give you and answer. >> marty thank you for joining us today. >> great to be here. >> this is just a gig here four. >> gig for you too. >> no you got the "new york times". you got deal book. you got billions. things are just little gigs for you. >> coming up, erupting disruption the gigs a volcano blows its lid in alaska. some amazing pictures you need

to see next on "squawk box" as we head to a break. take a look at futures this morning. dow will open off 58 points. back in a moment. the whales.or most of the orcas at seaworld were born here. sending them into the wild wouldn't be noble. it could be fatal. when they freed keiko, the killer whale of movie fame, the effort was a failure and he perished. but we also understand that times have changed. today, people are concerned about the world's largest animals like never before. so we too must change. that's why the orcas in our care will be the last generation at seaworld. there will be no more breeding. we're also phasing out orca theatrical shows. they'll continue to receive the highest standard of care available anywhere. and guests can come to see them simply being their majestic selves.

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welcome back to "squawk box," everyone. check this out. some amazing pictures from alaska. alaska airlines cancelled 40 flights after a vurk erupted in the state yesterday. cloud of volcanic ash proes,000 feet into the airing covering 400 miles. cancellations affected 3300

passengers so far. >> that's a carbon footprint right there. when we come back we'll go behind the wheel with the 2016 car of the year and bring you the big bucks behind these hot rides. the publish of the robb report will join us next. serena williams. hi watson. you are a fierce competitor. i've heard that. i have analysed your biggest matches. oh really? when down a point, you serve an ace 5.8 times more than other top players. you sound like a coach. i am not. but i can customize training programs based on biomarker data. watson, that's pretty impressive. you might say i am the serena williams of cloud-based cognitive systems. nah, i wouldn't go that far.

fasten your seat belts, we're putting you in the driver's seat of the 2016 car of the year. robert frank joins us now along with over $1 million worth of wheels. robert? >> good morning. over a dozen of the most expensive cars on the planet compete to be named car of the year by rob report. this year the select group was chosen choosi choosing. >> take 13 of the most expensive cars on the planet, set up a course, sunny san diego, add some champagne, and start burning rubber. ♪ every year the robb report magazine brings together over

200 wealthy car collectors to name the car of the year, ferrari, porsche, lamborghini, mclaren, mercedes send their best and greatest models in hopes of winning the trophy. the drivers don't hold back. >> that was ridiculous. >> how fast did you go? >> that's off the record. >> this is a stud car, man. this is a total stud. >> we don't want to get out. >> reporter: but these are discerning buyers, and they scrutinize every detail from the suspension and power to the seat stitching, champagne holders and doors. >> it's a beautiful vehicle. 100% attention to detail. it's luxury, pure elegance, class. >> reporter: these testers matter since they're all potential customers. >> awesome. >> reporter: as well as voters in the robb report reward. >> the manufacturers understand the importance of this event. the people here are really key

influencers within their social sish cals. within social media. they're the types of people that others follow. >> reporter: joining us now to name the winner and talk about the competition is dave arnold, publisher of robb report. so who won? >> ferrari. it's a tough competition. every year we have a lineup of vehicles, typical 13. we're never sure who will come out ahead of the pack. >> it's a little cliche. gee, the ferrari won. this is a 480 gtb, twin turbo, what made this so much better than all the other cars? >> i wouldn't say it was so much better. it was marginal. we have 200 people voting avoss the t across the ten days of the competition. for this the allure of the brand, the scarcity of it also. people want what they can't get.

>> we have about a million dollars worth of cars here. these are the runners up, this is the spider, this is the lamborghini roadster what about these cars, do you think, made them so special among readers? what do readers add that just having an editor driven competition wouldn't meet. >> everybody who comes to here is a car collector on some level. some a few cars, some dozens of cars. so their opinion is important to the manufacturer. >> let's talk about price. the mclarclaren, this has a wai list. $245,000 car. this is the king when it comes to price. the lambo, about $500,000. given the global economy and the volatile stock markets and so many high-priced cars coming on

the market, can the market absorb it now? >> i believe it now. the lamborghini is a good example. they're only making 50 of these vehicles. it was sold out within a month of it being announced. there's a marketplace for seconds such as this. >> a $500,000 car and they sold out. >> in 2 1/2, 3 weeks. all committed. delivery will take place over the next two years. that demonstrates there's room in the market for these types of high performance collectible limited edition cars. >> joe, back over to you. >> how much was the ferrari, robert? >> this is 245,000 starting. the version tested by robb report drivers was over 300,000. you want the seats, the special this, the carbon fiber. again, ferrari, this is a two-year waiting list. it's a twin turbo. it's the first time ferrari made this class of car in a turbo, given the famous ferrari engine, some were dubious.

but good reception given the two-year waiting list. >> waiting list for us, do you think? >> they're just down the street, so maybe they'll get it to 18 months. they'll leave this today for me so i'll test it out. >> be careful. coming up, when we return, mobile phone plans for those who never talk on their phones. details next as we head to a break. a look at u.s. equity futures. we're down. retiring retired tires. and i never get tired of it. are you entirely prepared to retire? plan your never tiring retiring retired tires retirement with e*trade.

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welcome back to "squawk box." t-mobile is acknowledging many of us don't use the phone part of our phones anymore. they plan to launch a data-only plan later this week which includes unlimited texting but no voice service at all. the plans averago up to $95 a m for two gigabytes. walter, do you talk on the phone occasionally? >> that's not a bad idea. my daughter never talks on the phone. i have two phones. >> sometimes you do say, listen, this is taking too long, let's talk. you could text everything you need to know. >> in a world where we don't have encryption -- >> you better get ready for that

world. >> encrypt that. >> that's why -- >> get ready for that world. freedom will win out, as it always does. okay? >> yes. >> why you think this is freedom? >> i hope so. >> becky, thanks. you're the nice one here. >> good to see you. >> high bar. make sure you join us tomorrow. right now time for "squawk on the street." good morning and welcome to "squawk on the street." i'm kelly evans with simon hobbs and michael santoli live from post nine at the new york stock exchange. futures looking for a lower open. the dow implied to open lower by 63 points. the s&p 500 giving up six. the nasdaq ten. european markets kicking off their shortened trading week after the easter monday holiday yesterday and doing s in negative territory. the dax down about 0.4%. declines for the f